Shrinking Empire
Updated: Feb 12, 2018
ZURICH/LAS VEGAS (Reuters) - General Electric Co <GE.N> said Thursday it is axing 12,000 jobs at its global power business, the struggling industrial conglomerate's latest effort to shrink itself into a more focused company.
New GE Chief Executive John Flannery last month outlined plans to shrink GE's sprawling empire of businesses built up by predecessors Jeff Immelt and Jack Welch, whose strategy was based on spreading risk across a broad range of industries.
GE has previously said it would exit its lighting, transportation, industrial solutions and electrical grid businesses. It also plans to ditch its 62.5-percent stake in oilfield services company Baker Hughes <BHGE.N>.
In Thursday's layoffs, nearly a third of the company's 4,500-strong Swiss workforce could be cut, while 16 percent of staff in Germany are also likely to be axed. GE said it had begun talks with labor leaders about the steps. Union leaders in Germany reacted angrily to the job cuts.
"The announcement by GE that it wants to cut thousands of jobs across Europe is neither strategically nor economically justifiable," said Klaus Stein, the representative of the IG Metall Union at GE's plant in Mannheim. "We are not going to accept this, and we will fight ... to preserve jobs."
Demand for new thermal power plants dramatically dropped in all rich countries, GE said, while traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures. Hardly any new power station projects had been commissioned in Germany in recent years, GE said. Heightened Asian competition had also increased price pressures.
(Reporting by John Revill, Alwyn Scott, Rachit Vats and Georgina Prodhan; Editing by Michael Shields, Nick Zieminski and Admin)